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Tax Planning for Corporate Owner Managers
Introduction & Course Administration
Approach used in teaching this course and the content covered (7:13)
Administration - Course Payments, Refund policy, certificates of completion (6:25)
Introduction to the course and how it is laid out (6:07)
Certificates of completion - refund policy (2:06)
Questions for this course and where to go for additional knowledge (3:34)
SOFTWARE: Registering & accessing full student version of Intuit Profile (6:52)
Course Notes & PowerPoint Presentation Slides
Module 1 - Foundations of Compensation Strategy - Building Your Craft
Holistic and practical approach with clients - financial and goal planning (4:32)
The decision is not yours to make - provide info and let them decide (6:09)
Don't use charts and tables to confuse clients - use software (11:26)
How to get the software to do our heavy lifting - Simple planning methodology (9:49)
Build scenarios using Profile - try the option you're thinking of - see it at work (7:46)
Share structure and review of the Minute Book is your first step (4:08)
Share structure of corporations and how to set up things properly (6:32)
New income sprinkling rules put into effect by Liberal government (4:32)
I don’t care what your neighbour's accountant is doing for them (5:18)
General considerations 1 - Family situation as the foundation of plan (5:52)
General considerations 2 - Other income and spouse's income (5:23)
General considerations 3 - Future income and effect on current plan (3:52)
General considerations 4 - Preferences for CPP and RRSP planning (5:59)
Appendix - Tutorial 1 - Update on the Tax Consultation of Private Corporations (5:25)
Appendix - Tutorial 2 - Tax on Split Income (TOSI) - What gets caught in the new rules and exclusions (7:42)
Module 2 - Salary & Dividend Planning for Owner Managers
Introduction to module on salary and dividend tax planning (1:40)
Discussion 1 - Disciplined approach for clients and payments (4:56)
Discussion 2 - How much money do you need for your lifestyle (7:13)
Discussion 3 - Saving for retirement - who will be responsible (6:54)
Discussion 4 - Future mortgages and income requirements (6:56)
Discussion 5 - Always consider child care expenses into mix (4:56)
Always look at the net amount and not the gross - instalment difference (3:29)
Best of both worlds - Hybrid of salary and dividend mix (2:42)
A simple structure for salary and dividend mix - salary then bonus (4:43)
Understanding CPP premiums and payroll tax - EI - Employment Insurance (5:06)
For owner managers between 60 and 65 probably better dividends (4:45)
What if company has R&D or Film credits? Potential SRED refunds and credits (2:59)
Planning matrix - take all of the above and answer questions (4:40)
Putting it all together - the client profile and general planning landscape (3:47)
Module 3 - Planning with Clients Using Scenarios and Examples
Introduction to Module 3 - Foundations on building your craft and putting together tax plans (2:16)
SCENARIO 1 - Basic salary vs. dividend analysis (13:42)
Why you shouldn't use tax tables and web calculators for actual tax plans (11:28)
SCENARIO 2 - Analyizing a salary & dividend mix as compensation and topping up CPP (6:07)
SCENARIO 3 - Both spouses involved in company and spitting salary (12:09)
SCENARIO 4 - Both spouses involved in - salary for one, dividend for the other (5:29)
Children working for the business and going to post-secondary (6:09)
SCENARIO 5 - Paying kids in post secondary school a salary (10:31)
SCENARIO 6 - Building on base and other scenarios with RRSP planning (9:11)
Getting the most bang for your clients buck from lump sum contributions (6:01)
SCENARIO 7 - Factoring in child care expenses for owners with children (8:15)
Understanding what is commonly referred to as the tax-free dividend (8:34)
SCENARIO 8 - Analyzing and including the clients tax credits into the scenarios (10:29)
Use this methodology when meeting and planning with clients (4:13)
Module 4 - Filing, Administrative & Practitioner Issues with Salaries & Wages
Introduction to filing, administrative & practitioner process for salaries (4:17)
Who will be administering the payroll? - Understanding the different options available (4:10)
Declaring & paying year end bonuses and the rules you need to know to pay them (6:53)
Using software to calculate the payroll instead of payroll tables - Methodology (10:16)
Making sure the payment dates for bonuses are considered and payments made (5:40)
Year end enclosure and instruction letter for payment of bonuses declared (5:05)
Each family member should have a payroll file similar to other employees (5:29)
Why you could be asking for trouble with no tax or CPP deductions (7:37)
Importance of the January 15 date for bonus and salary planning (3:32)
You are going to be busy the first 2 weeks of January (2:38)
Reconciling the payroll accounts and preparing the T4's (11:07)
What can go wrong if you only look at the gross pay and not the net pay (4:38)
Using the CRA online calculator to determine the net pay (9:23)
Module 5 - Filing, Administrative & Practitioner Issues with Dividends
Introduction to filing and administrative process for dividends (1:59)
Review the classes of shares to ensure dividends can be paid (4:37)
Calculations may be necessary to determine per share amounts SC (6:22)
Consider the new rules for paying dividends - over-arching principle (5:27)
TOSI - Weaving through the complexities of the new rules (5:47)
Getting off the TOSI train and meeting any exception (2:48)
What are the exceptions and excluded amounts to TOSI ? (4:42)
Quick reference chart & CRA site to help you navigate the complex rules (4:55)
Excluded business test for active involvement in the business (5:30)
Reasonable return test for reasonable return on capital put into business (4:40)
Excluded shares test for non-service related business corporations (2:47)
Letter to lawyer to update the minute book (4:03)
Can accountants do the Minute Book update as part of their practice? (7:32)
How frequently should you declare and pay the dividends legally (5:12)
Are there any remittances for dividends? - Personal tax payment implications (5:56)
Choosing to pay eligible or ineligible dividends (9:20)
Preparing and filing the year end T5 slip and summary for dividends paid (3:11)
Instruct or help client determine what their current CPP status is (5:00)
Module 6 - Shareholders - Loans, Benefits & Other Compensation Issues
Introduction to shareholder loan, transactions and other compensation benefits (2:23)
The very common situation where there is a shareholder balance (4:51)
The two ways of clearing out the shareholder balance - dividend and salary (4:10)
Clearing out the shareholder balance with dividends (8:52)
Clearing out the shareholder balance with a salary or bonus (13:07)
Shareholder loan balance rules and clearing out within the next year (7:10)
Beware of Section 15 of the Income Tax Act - Subsection 15(1) and 15(2) (6:57)
Paying personal expenses through the corporation and the double tax ressult (4:52)
Tax implications of borrowing money from the corporation (4:06)
Benefits in the capacity of shareholder vs employee (9:13)
Issues with CRA even when you think you've covered all the bases (7:05)
The new TOSI rules with respect to shareholder benefits (6:17)
How to compensate shareholders for the use of their vehicles (9:16)
Paying an allowance and then deducting actual vehicle expenses (4:36)
Intro to home office expense deductions for corporate owner managers (3:20)
Home office expenses - Auditors all over the map (5:21)
The difference approaches used by accountants asked to CRA for opinion (4:06)
CRA's guidance and opinions on the variations of home office (6:11)
Offering group benefit plans to employees and shareholders (6:35)
Other common medical benefit plans to consider as part of compensation (8:55)
Module 7 - Compensation Strategies & Important Issues
Introduction to strategies module and how you should study this unit (3:07)
Protecting the corporation and using a Holdco for retained earnings (10:11)
Maximizing the corporation as a savings vehicle (13:52)
Thoughts on paying eligible vs ineligible dividends to shareholders (9:39)
Maximize RRSP with salary - typical strategy and considerations (8:09)
Tax planning for owner-managers working during retirement or nearing retirement (12:29)
Stanley and Scott example in module 1 - unrelated and one doing more work (7:03)
Saving outside of RRSP that way only have to pay tax on investment income, not investment balances (16:21)
Using a TFSA as an alternative to contributing to the CPP (9:33)
Factoring in child care expenses in compensation mix - minimize salary (9:26)
Paying family members a reasonable amount for the work they do (5:45)
Declaring income even if not necessary - mortgage application considerations (7:37)
Cadillac insurance policy using the CPP system - Disability benefit (8:35)
Tax deferral strategy using bonuses and the payment rules (8:55)
Mixing and matching the various ideas and approaches in this module (4:34)
Why didn't I factor inflation or future taxes into any of the planning scenarios (8:14)
Module 8 - Common Owner Manager Situations & Other Issues
Common examples of small owner managed business and other issues (2:04)
How most small owner-managers run their business and the transactions to expect (5:32)
What to look out for in small owner managed business transactions (9:03)
Example of a typical general ledger for the shareholder before expense analysis (7:20)
Review of Scott's expense reports and transactions to book (6:43)
Booking the transactions and review to determine Scott's final compensation (4:54)
EI rules for owner managed corporations - shareholdings and non-arm's length (4:56)
What if you have someone who wants to pay EI premiums & collect benefits? (3:36)
What if you have someone who doesn't want to pay EI premiums? (4:26)
Paying $500 non-cassh gifts to employees including the owner manager (5:20)
Can owner-managers claim employment expenses? - Beware of potential changes (8:45)
Claiming management fees or other employment inomce on the T1 not recommended (8:11)
Factoring in other costs - WSIB and EHT (4:50)
Conclusion, thank you and parting advice (2:06)
The difference approaches used by accountants asked to CRA for opinion
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